WASHINGTON – Imports dropped in June by the most in a year as the U.S. economy moved closer to energy independence, helping the trade deficit unexpectedly narrow.
The gap shrank 7 percent to $41.5 billion, the smallest since January, from May’s $44.7 billion, Commerce Department figures showed Wednesday in Washington. The drop in purchases of foreign goods from the highest levels on record included declines in autos, cellular phones and the lowest petroleum imports in more than three years.
Demand for goods made overseas will probably rebound in coming months, helped by growing consumer spending and business investment. Exports, although the strongest on record, were little changed from the prior month, a sign markets overseas will represent less growth for American factories as Europe’s economy struggles to pick up and geopolitical tensions mount.
“Imports are going to bounce back because of the strength of the U.S. consumer,” said Jay Bryson, global economist at Wells Fargo Securities LLC in Charlotte, N.C. “The U.S. is doing better than most advanced countries.” While exports also may rise, “overall, trade won’t add a whole heck of a lot to economic growth,” he said.
Stocks rose as a rally in energy shares overshadowed concern the Ukraine crisis will escalate. The Standard & Poor’s 500 Index climbed 0.3 percent to 1,926.67 at 11:57 a.m. in New York.
Other data released Wednesday showed rising tensions with Russia over Ukraine threatened the euro area’s recovery. Italy unexpectedly fell back into a recession in the second quarter and German factory orders dropped in June by the most since 2011.
The trade deficit in the U.S. was projected to widen to $44.8 billion, according to the median forecast of 66 economists surveyed by Bloomberg. Estimates ranged from $41 billion to $46.7 billion. The Commerce Department initially reported a $44.4 billion shortfall for May.